The UK’s financial services supervisor wants to scrap “nominal” regulatory thresholds to make compliance costs “proportionate” and prevent more financial firms from falling under rules simply because they have grown in size rather than risk.
Under plans by the Prudential Regulation Authority (PRA), the part of the Bank of England responsible for ensuring market stability and resilience, regulatory requirements around how much firms need to hold in assets to prove their solvency, for example, would increase automatically in line with how the economy grows, rather than through “the manual ad hoc updates that currently take place.”
